Report: New Apple TV set-top due in September, will have remote with touchpad [View news story]

Apple constantly integrate elements. The Apple TV is unlikely to have been delayed if it was extended as a streaming tool for their coming television service. A look at the bigger picture for the home, their acquisitions and features they can integrate which are not currently available are clues.

The obvious is to add Siri, a voice controlled interface. The remote I suspect will have swipe and scroll features like the Magic Mouse. I expect the surface to respond to the touch but a full blown track pad runs counter to the minimalist ideas they usually design. With pressure sensitivity they can remove buttons. I expect something quite simple integrating touch technologies found in their other devices. Eventually I expect them to expand Siri as an offline option because of their Nouvaris acquisition. A local server would be needed and their Mac line seems the logical answer. A laptop set up as a wifi network would allow for local control in remote locations such as a boat, cabin or camping. A connected cell phone would add online Siri access when available.

Other features I foresee are some kind of pvr functionality, secure medical data storage, and a home automation control center. They will also bring the music streaming and tv streaming to the home devices. There is likely a gaming platform in their future as well.

Strategy wise I think they want to own the Internet of Things component. By offering the tv streaming for near cost but tied to the Apple TV, they will encourage the consumer to deploy them as the standard interface widely. A legacy model for those who want current use such as Netflix or other like services, with added home automation still achieves the same objective.

The airport time capsule provides storage already and could easily be updated to include pvr, gaming and secure encrypted storage. Add a processor and interface and app capability for the desired functions. Of course voice control is central to all interfaces.

They acquired PrimeSense, a significant investment, and I expect at some point to see it deployed through a device. The AppleTV because of its default location in the living spaces, where gestures will likely find the most utility, seems a likely future upgrade. Integrated with exercise, gaming, creativity, and entertainment, the whole package gets stickier and just a part of everyday life. Standard interfacing from home, to car, to mobile will eventually creep into work. Not truly rapid spread viral, but eventually most pervasive and permanent in its invasiveness.

Apple: Mac Sales Growth Driven By China In The June Quarter [View article]

At the WWDC in 2011 Steve Jobs said two things, paraphrased as "the death of the PC."

"About 10 years ago we had one of our most important insights. That was that the PC was going to become the hub of your digital life."

He then went on to talk about that model was now forever changed.

"All these new devices have communications built into them and they can talk to the cloud whenever they want. Now if I get something on my iPhone, it sends to the cloud immediately. We are going to demote the PC to just be a device. We are going to move the digital hub, the centre of your digital life, into the cloud."

The death of the PC- Cloud replacing the PC as the digital hub- Primary content creation moved online- The key was network speed matured- Content went mobile - information hatched and left the nest- Mobile apps meant information anywhere

There was a role change, not a funeral, it was a change in function - its primary role died.

With just the catch phrase out there, many interpreted it, that tablets, etc. we're replacing the PC. Tablets bought, with that in mind, disappointed some buyers, who now represent users, who won't tablet refresh, as it was the wrong product for them.

Those buyers were, however, impressed with Apple quality and integration and are now part of the strength behind Mac sales. Many of these users are more casual and will create their personal content on the PC, rather than subscribe to online tools, which would only get sporadic use. There will always be legacy users.

Microsoft tried to court the replacement misconception, by hybridizing the laptop, with a "tablet" label. However, when it walks like a duck, quacks like a duck...... Well you get the drift.

The concept of tipping points seems relevant here. The eco-system has had to mature and gather steam. Tipping points often occur at relatively low levels of adoption, because the vision has weight. Although, not everything tips as fast as the smartphone. The computer, as a device, will evolve with new purpose as home automation, health kit integration, and local server functionality also gain steam.

Timing is an element that Apple have learned how to excel at. It's easy to get ahead of yourself despite having vision. The iPod wasn't Apple's first try at a music device, the Newton was their first tablet. They know about being patient and getting the timing right. Getting it right is more important than getting in early and disappointing.

The diving sales chart fails context relevance for extrapolation. Context is who, when and where. US only online sales is represented on the chart. Timing is an issue. Store sales started mid month. So the week before store availability the online sales slow and that is relevant, how? The question is whether people prefer to shop for a watch in person or online. I think the dollar value of the purchase is a defining factor when there is a choice. I don't see car manufacturers switching to online shop sales releases of new models.

The conclusion reached was illogical. It's like saying iPhone sales are plummeting a week before a new release. People will wait a week to choose a watch in person and not have to wait for one to be shipped. Where is an attempt at research on non-US online numbers? There is no relevant reference point to draw any conclusions. The lack of sales numbers for in-person shopping mean the online sales numbers have no basis for evaluation concerning total sales.

Cook has it right. Total sales are the issue not how they parse. Nearly every mobile device has an iPod root. So each next generation could be said to be a member of the iPod family of products. iPad sales, laptop sales and phablet sales likely affect each other. Tablet owners choosing a new MacBook Air, or phablet doesn't affect total sales and may improve margins. The real numbers from an investor standpoint are additions to the Eco-system.

Recent polls show that about 30% of Android users are planning to jump ship to Apple. This despite telecoms offering cash for people to buy some Android models. Microsoft are changing focus after a failed Nokia experiment. Google face privacy headwinds as Cook served notice, user privacy is paramount. Banks agree and chose to pay Apple rather than go with a free Google option. Apple made the fingerprint sensor available to developers to strengthen user security and non-compliance will carry consequences. From an investor standpoint the question is where is the competition going to come from and how strong will it be. Right now they are in a sweet spot.

NLet's examine context first. We have a seasoned group of industry veterans steering the ship, a company without debt and a cash pile, companies with intellectual property lining up to sign partnership deals, law firms willing to partner to protect that IP and share expenses, inside buying and a pipeline of contracts feeding significantly more revenue into the company over the next 4 years than the actual market cap of the company.

Despite a willingness to quote some historical numbers there is no real history. This company has IP but nearly was broke. Enter Jim Skippen. He repurposed the company to monetize its IP. The result was a cash pile. An issue arose with law firms and aging patents. Lawyers were eager to chase any possible litigation as long as the firm paid. Older patents represented manpower to maintain with little or no return.

Wilan engaged an independent analytical firm to help maximize monetization while limiting risk. The result was a move towards partnerships. This significantly reduced risk. Law firms no longer chased anything frivolous, resulting in legal fees falling significantly. Rather than pursue companies to acquire under monetized assets they partnered, sharing costs and profits. This limited risk to their R&D and shared legal costs, no larger cash acquisition costs. They also divested themselves of or retired older assets to direct research into more profitable use of personnel.

Acquisitions are still being made when significant assets are presented by firms who would rather divest themselves of the IP rather than partner, even if they are doing so at a discount. These are opportunistic acquisitions. When looked at in the context of the future, they own significant medical patent technology standards, plus an increasingly strong Internet of Things footprint. They are the primary proprietary wireless technology patent holders. Their patents extend beyond into almost every form of connectivity, wired and wireless.

With impediments caused by leeching law firms and untargeted resource allocation removed, some optimism is warranted. No longer the pursuers of patents through acquisition, they are being pursued by those who would prefer to monetize but don't want to be in the patent protection business, preferring to partner with Wilan.

I too like Student Transportation but consider them riskier with their high debt.

Over 65% of the stock is owned by institutions. These pension plans, portfolio plans, mutual funds, etc. are often installment based. Contributions coming in monthly need to be invested based on preset criteria. Rebalancing comes at the end of specified fiscal periods and can force the sale of parts of strong performing stocks to maintain portfolio weight ratios.

Monthly contributions are usually distributed into stocks already chosen previously, just adding to those holdings. Depending on rebalancing dates those added monthly contributions may be invested differently to accomplish ratio adjustments. This is a dynamic process not a static one. The end of June could be such a rebalance time for funds using quarterly or semi annual rebalance dates.

You can track the effect of monthly investment effects for many stocks by familiarizing yourself with specific fund holdings. Pension funds for example must liquidate some assets monthly to distribute income checks. Some ongoing rebalancing can be done at that point. Then at month end and to a lesser extent, mid-month, as payroll and planned contribution funds receive deposits the money must be put to work based on individual plan mandates. Those incoming funds tend to create demand and drive prices upwards in the period encompassing the last 2 business days and first 4 business days of the month. There is also usually a price lull due to some liquidation for month end checks sometime after about the 17th of the month through about the 25th. Month length and the dates of weekends can have an impact on the timing.

And, this is in months without black swan events like grexit or unexpected poor jobs numbers. Each month has its own context and the above are just generalizations found in a normal month without significant impacts from extraneous factors. Part of investing is about prediction. Timing is a cog in that wheel. Dividends are rewards for patience and to allow timing issues to be less critical. They are incentive to allow product and profit cycles to complete and push equity prices up.

Preservation of capital is paramount. Alex is supplying us with color other than red flags to stay the course. Any uncertainty created by bearish comments by media/analysts are quickly dispelled when thoughtful analysis, not conjecture, provides facts not fortune telling, to back a thesis.

Thanks for both the analyses and the accompanying reasons used in the process.

As an Apple shareholder I hope it costs them billions. The more it costs the better the response. It goes back to the old adage that no publicity is bad publicity.

From an historical perspective, this smacks of greed from an already highly compensated star. Apple actually in large part saved the music industry when it introduced the iTunes Store. At that time music piracy was rampant and yet people were open to purchasing individual songs when the industry were trying to package a hit with other questionable content on a disc.

I see a parallel in the current music streaming business to the 50's and 60's radio play. Music promoters visited and signed deals with individual stations to play and highlight their artists. The multiple streaming services that have sprung up are like the local stations with a much larger audience reach. That reach gives them leverage, they can deny access to a large audience unless the artists lower the royalty. Apple already has a good relationship with the industry and the fact that so few made the same fuss that Swift did, is a resounding recognition of their legacy. Swift didn't get the memo, albeit unwritten. Her actions smack of spoiled brat, not enlightened business person. She gets a pass however, because she wasn't part of the generations of artists that Apple saved by reinventing the industry. By saying nothing, they showed more class, and their actions can only solidify their status in the industry.

Apple brings streaming under a huge umbrella, forcing other services to pay the toll, rather than lever the artists, especially the small independents.

There has been speculation as to the role of the Mac in Apple's product line lately. A look at computing and trends seems warranted. The birth of the PC was created by smaller more powerful processors, cheaper memory and slow networks. As prices declined consumer demand increased. Network connections were so slow that almost everything moved to the desktop. As network speeds and capacity have improved the reverse has happened. Cloud computing has allowed companies to get out of the computer business and subscribe to services rather than doing it in house. The desktop has reverted to more of the role of a terminal but with some new functions. It still remains the hub around where peripherals are centered. It retains a storage and backup role and rather than being a personal computer it has now become more of a "privacy" device. Apple has recommended not storing health data in the cloud. The computer has become a server, collecting data, doing backup duties, scanning, printing and acting as a terminal connected to cloud content creation and manipulation. Only applications that require extremely powerful processing remain tethered to the desktop or local mainframe. Movie, sound or other content rendering will stay local. The need for a local server will increase with home automation, and the need to bring the voice recognition interface to the local environment.

Another trend is worth noting. It is about how electricity and its evolution have all become embedded in the environment. First simple lights and outlets, in each room. Then electric motors became widespread. Circuits expanded and computers have now found themselves in nearly every appliance, our cars and watches. Voice will become the interface and the hardware necessary will be found in that environment, for it to embed. The basically, near cost, streaming service Apple plans to launch, looks like the springboard to have an embedded voice controlled device deployed widespread in homes. The computer helps provide the server function that must provide connectivity, security, storage, and local functionality. It is becoming a local appliance, with functions that don't lend themselves to mobility. It's role is changing, for the consumer, from content creation to a multifunctional device integration server, a home hub, a connection, distribution point.

The future of Apple is not going to be determined by the Mac. The expansion into the IoT (Internet of Things), will likely increase Mac sales but probably more towards the mini end as a local server. The expanding capability of tablets will fragment the phablet, tablet and laptop market further. The embedded voice interface is a challenge. It is one thing to get an AppleTV in each house but it may only be in one room. Everyday devices like speakers can double as voice interface conduits but the watch allows for that local mobile connection, soon only limited only to wifi's reach. Headphones offer potential as wearables allowing for Siri connectivity. Headphones and watches are among the most widely worn devices. Glasses look like a good bet too. I'm not talking about a Google concept, just wifi connectivity with a small speaker for interfacing. Permanent fixtures like light switches or plug ins could be wifi voice conduits. The computer will pull it all together, an organizing entity in its rebirth.

The second version of the Watch OS is starting to reveal the standalone computer functionality. The computer will act as a conduit for data from connected peripherals and as a collection point and display of requested data. It will do a minimum of processing, instead it will delegate that action to slave computers it can connect to. The new AppleTV rates to run programs/apps compatible with the watch, plus freeing it to solo connect via wifi allows cloud based computers to serve the slave function.

A next generation Time Machine rates to double as another computer it can connect to. Allowing backups of not just computers and devices but pvr functionality to go with the streaming service. An iOS user interface and dedicated gaming capability could create a whole new spectrum of products and services. Each could be a separate device supporting both health and home apps.

Apple look to be planning a local area network voice recognition server for Siri, by way of their Nouvaris acquisition. Either the AppleTV or another device like the Time Capsule look to serve that function. Handoff can allow functionality to be allocated based on context, blurring the line between which computer is acting as a master and which a slave.

The 17% purchases of two or more watches confirms my forecast that there is a walkie talkie dual connectedness. The personal connection is part of the appeal. A watch isn't the same as a solo act, it needs a companion. As connections increase the appeal will go up. When it replaces my remote control because it connects me via voice to functionality, my house, my health devices, my tv, then I will bite. And, that connection is to function, not people.

The new call functionality seems similar to what I experience with my iPad. My iPad does have a cell chip so it allows me FaceTime without wifi. However, the cell phone needs to be connected to the same wifi for me to answer it from my iPad.

How Apple Will Reduce Its Interest Expense By More Than 50% [View article]

The cost of borrowing and the accumulation of debt are focused on in all of these analyses. The real offset of cost of borrowing can come from the cash pile itself. Wise use of the unpatriated funds can result in lower costs of production or simply investing elsewhere in any manner that earns more return than the actual borrowing costs. Overseas acquisitions appear to be on their radar based on their recent augmented reality purchase out of Germany. Those acquisitions are netting them more than property, actual and intellectual. They are getting minds; minds with expertise and ideas, that can be transferred to other areas within the Apple universe. Taking years of time off of R&D plus owning the technology rather than having to work around the patents, is hard to value.

Apple has helped its suppliers build out their capacity in order to be able to supply demand and retrofit the old to create the new. Each supplier gain the capacity to produce and earn more in the process. In return Apple get preferential treatment on all levels from pricing to their place in the queue.

Cook is a master of the supply chain. The media characterize the resultant preferred pricing as leverage being used to force these companies into lower prices without mentioning the give and take nature of the true relationship. Lower margins to Apple are easily tolerated when the net profit in dollars is higher. Those investments are allowing Apple to decide how much of the higher profit they want to remain overseas and how much they want to have come home to help pay for US based expenses, dividends and buybacks. Either way the extra profits offset the costs of borrowing the funds used. And, the costs of borrowing are declarable as an expense. The tax savings there also need inclusion in an ultimate analysis.

Borrowing the money may make sense even if the repatriation issue never existed. The underlying issue of the cash pile is that the larger it becomes the more Apple start to transition to being a wealth management company. Needing multiple core competencies detracts from the simplicity it has tried to maintain. Buybacks help to keep them focused on the consumer nature of their core business.

Well done Alex. Giving us new perspectives helps make the big picture clearer.

Thanks for the well written piece and reminder of the context we need as shareholders. Making legitimate connections between suppliers and the ultimate window it can provide as an early warning system was well presented. The constraints concerning clarity, since Samsung are in the mix, is duly noted. Investing is about staying the course as long as the original thesis is intact or improved. Knowing where to watch for red flags of a changing thesis in advance of the company reports is a valuable resource for all shareholders. This epitomizes why I like to use this forum as a resource. We need to sluice through a lot of mud to find the nuggets. Thanks for your golden insights here.

This author is a self admitted hedge fund manager. I admit I don't know whether a short or an option is deemed "a position" for disclosure, since no shares are actually owned. I consider them so but sometimes people who hedge, play with rhetoric. This writer always seems to employ a short type of rhetoric. He tries to undermine certainty in the position. He does that by questioning ideas like differentiation. Asking questions is a way of creating uncertainty without actually providing 'true' evidence, just implying it. He used the same technique I just presented. He questioned Apple's "true" differentiation. Another way to create context undermining certainty is to expand context to include implied significant others with implied "higher standards", the undefined implied expert group identified by the label "investment community". He then revealed that they are a faith group rather than belief based. Beliefs are subject to proof. Faith is a jump to conclusion insight we are to blindly accept type of rhetoric. I prefer my analysis to be grounded in facts for prediction purposes, not some fly by the seat of your pants evangelism. They talk about that kind of thing in addiction meetings, Gamblers Anonymous anybody.

Nobody is talking about the major pricing advantages Apple possess. They offer the single biggest global content distribution system for developers of content. This gives them pricing power. It also places them in a unique position since they are their own CDN provider. Most significant music streaming services can be priced out of the market if they decide to go there. Without doing that they can use the extra profits to acquire competition and expand services/value. The 3 month free trial, as opposed to 1 month, should make their competitors squirm before long. Unleashing it on Android will leave the other services nowhere to hide.

The coming TV service should echo those advantages. Streaming television at near cost with the same CDN advantage already has television providers preemptively offering lower rate 2 year contracts before the real competition hits the fan. That service will likely be limited to Apple TV owners as I believe that the intent is to have people buy the device to get the service. With massive deployment into a majority of households they will literally dominate the home marketplace for the Internet of Things.

Security will be the biggest issue for the IoT. Apple has sent a clear message that they are looking to protect the consumer. Third party developer access to adding fingerprint protection to apps and access to data. A clear message that private data is just that and serving notice that non-compliance has consequences. From health, to home, to consumer activity, the bar has been raised.

Voice control allows for simple devices and clean interfaces. They have committed to improving Siri. Their Nouvaris acquisition signals a desire to bring voice to the local network, not needing Internet. They need a server device to deploy it. The Apple Time Capsule looks to be a good device to upgrade. How good can a local service be? Remember that Sherlock faced Jeopardy champions without internet connectivity and won. Add PVR functionality, backup memory, an interface and iOS onboard with Watch connectivity and the ecosystem just got more robust and stickier. They could also include gaming functionality.

The pieces by themselves may not look that exciting. If you focus only on DaVinci's brush strokes, Mona Lisa won't smile for you. You need to pull back and see a bigger picture.

I asked myself this "what could be in the AppleTV that is so involved and important that they delayed releasing details until later in the year?" They obviously want to get it right. This for a low margin television service? The hardware sales for this device could astound, if done right. How about the future? Could this drive stock prices? Is any of this found in this article? I believe in Apple ingenuity, and it's not faith based.

Sounds like something out of Woodstock. "Keep the Faith Baby." I'm not drinking the koolaid being offered here.

Whether Apple are going to reserve the acquisition to just enhance their own store experience or create a merchant product is to be seen. I can't help but think that there has to be an integration of WifiSlam, added accuracy from the programmers from their Coherent Navigation acquisition, iBeacons, ApplePay, and now the augmentation of real time location service possibilities. Real world cues from bar codes to signs can offer product information or transit schedules. A touch screen tap could bring up an exploded part graphic of an assembly instruction for anything from furniture to mechanical repair. A movie marquis could access a trailer. Combining this with a knowledge engine linked to voice offers a whole new dimension to user experience.

Now inquiry is not just search. It's a consolidation of context; who, when and where, with personal history, preferences and available options/knowledge. Your mobile device becomes a pair of eyes offering new perspectives on where you are and options based on the current time.

As to ideas about them collaborating with IBM, that idea is debatable since IBM already are offering augmented reality. I do think that Sherlock might make an excellent resource to incorporate into the whole big picture of augmented experience.

Apple took the offensive on behalf of users to protect the user. Tim Cook at EPIC said, “If those of us in positions of responsibility fail to do everything in our power to protect the right of privacy, we risk something far more valuable than money. We risk our way of life."

Google offer "free" services, but at what real cost. Access to your photos may not seem like much, but data mining can reveal a lot. The metadata, GPS, plus time and facial recognition are there to analyze. Context is about where, when and who. Decisions vary with that context. That selfie just made the user a target.

The issue is intent. In the case of Google and Facebook, the end game is to provide a compelling advertising case to sellers. They will wrap it up and spin it as an enhanced user experience, as if what they want you to spend your money on in a particular spot represents enhanced experience.

Apple represent the flip side. Once you have spent your money, the objective is for you to get the most bang for your buck. Enhanced tours of the Louvre using iBeacons with their app. A better experience at the ballpark as the app enhances your stay there. A better shopping experience as anonymity rules in your ApplePay purchase, protecting you from identity theft and fraud. Encrypted communications, like iMessages, protect against eavesdropping.

"Freedom in the marketplace" and a government only to willing to pry, make keeping Facebook and Google off the iOS platform impossible. Tim knows this and I suspect terms of use contracts for new apps and updates through the App Store, may find some significant privacy constraints being added. I believe he just served notice. The addition of a developer kit that gave 3rd party developers access to the fingerprint switch, is empowering the user to control everything from health data to their home automation.

The difference on the privacy front is whether to empower the user, or empower the advertiser. The financial community voted on Apple's side. They rejected Google's "free" Wallet over Apple's fee based ApplePay option, for just that reason. People should reject Google and Android for the same reason, their "free" comes at too high a price.

Ok, you've goaded me into a response. You make my argument for me in so many ways. You go with your phone sex, I'll take mine in person with real touch. Haptics is more personal. The point you made about people still having mobile devices and still having a need to maintain contact is exactly my point. The history of watches has no such legacy. Mobile devices do. We crave that contact, you acknowledged it. You want the watch AND a phone, in your world. A luxury watch has an outward focus, an almost insecure need for recognition, a haptic touch creates a narrow inward focus. If nobody notices the watch, the ego deflates, a strategy fail. If you receive a haptic touch, the recognition is immediate and gratifying. Instead of peacocking for attention, it was received in a real way.

Your point about celebrities shunning the social media limelight, begs the question of why they went there originally. They too crave recognition and social contact. Intimacy not a swarm is the goal, a connection not the crush of a crowd. In that effort to cut back they don't want to cut themselves off. The watch can create that connection to a select few, satisfying their need for contact and privacy in one move. They choose who to interact with and its personal and intimate.

I didn't deny the luxury watch its place, and the luxury watch industry need to realize that a new watch experience is emerging, not belittle its existence. Change happens much faster than often recognized. The Roman Empire was a dynasty once too. A legacy watch, passed on, rings nobody's register. The remains of dynasties and legacy's end up in museums, reminding us of yesterday.

And, the comment about "watches... being timeless", I could see people everywhere being glad they didn't have a mouthful of coffee destined to find its way out their nostrils. Please, no easy targets. I appreciate your verve for the watch industry. It reminds us of a threatened era, and how people hate to let go. I still cherish my landline but know it's a relic, needing to share tomorrow, not defining it. Your short recognized it, your rhetoric needs to, too.